If you do not timely file annual registrations, you run the risk that the Secretary of State may administratively dissolve your entity.  More importantly, if you do not follow proper corporate formalities, such as holding annual meetings, keeping accurate minutes and updating other corporate records, you subject your personal assets to potential liability through corporate veil piercing.  The veil of a company’s separate existence is pierced and the owners exposed to personal liability when a court determines a debt is not really a debt of the company, but ought, in fairness, to be viewed as a debt of the owner.  While there are many factors for piercing the corporate veil, failure to follow corporate formalities is a typical factor.

Annual corporate maintenance is certainly something you can do on your own, if you like.  Alternatively, you can engage your corporate attorney to assist.  It should not cost a fortune — in fact, I typically offer a flat fee annual maintenance package.  Whether you do it yourself or engage an attorney, I suggest you spend a few minutes thinking about annual corporate maintenance before the year ends.  It is also a good opportunity to do a general check-in with your corporate counsel on other business and legal matters.  You will then be ready to ring in the new year!

Interest-based negotiation is a strategy in which parties work to find a win-win solution to a dispute.  A form of interest-based negotiation was described in the book, Getting to Yes, by outlining four fundamental principles: (1) separate the people from the problem; (2) focus on interests, not positions; (3) invent options for mutual gain; and (4) insist on objective criteria.  These principles should be observed at each stage of the negotiation and adapted based on the other party’s response.

When a negotiation goes wild, think about and apply these principles:

• Are there personality conflicts or are responses to issues viewed as personal attacks.  If so, separating the people from the problem can take the sting out of the subject-matter and place the focus on the issues, not the people.
• If the negotiation is focused on positions, one party must lose.  It can be hard to save face in a loss.  Instead, focus on interests so that you can find a solution that satisfies both parties’ interests.
• Has the negotiation fallen prey to the “either-or” problem.  If so, you may not have considered alternative options.  I have yet to see a situation where there are only two possibilities.  Think creatively to find options, don’t focus your energy on proving the other party wrong.
• When interests are directly opposed, use objective criteria to resolve differences.  If you allow differences to spark a battle of wills, you will destroy relationships, waste time and not resolve the dispute.  If you define objective criteria, you will be more likely to agree on a resolution.

Of course, it can be very challenging when one party insists on using a position-based approach.  In my experience, I find that continuing to use an interest-based approach can be effective over time.  By focusing on the interests, you can often engage a position-based negotiator in an interest-based discussion.  Of course, at some point and with some people, these strategies may not be effective and you may need to try other approaches.  However, I think interest-based negotiation is a very important tool and can help resolve many difficult negotiations.  What do you think?

If you find yourself in this position, or in any situation where a customer or supplier becomes involved in bankruptcy, you should quickly reach out to counsel for guidance and assistance.  It turns out in the example above, there may be some interesting remedies provided under law if the supplier acts quickly and correctly.  However, even waiting a few extra weeks can be detrimental to a claim.

Turn over a new leaf and become proactive rather than reactive when it comes to legal matters in your business.  As they say, “an ounce of prevention is worth a pound of cure.”